May 4, 2017
In our last report we noted that mortgage loan interest rate numbers could be influenced by the substance of the most recent Fed announcement, or more specifically investor reaction to those details. Rates did try to creep lower ahead of Wednesday’s Fed event, and Wednesday morning it seemed like rates were trying to move lower still.
But the Fed came and went, rates began to move higher, and according to our sources at the end of the day on Wednesday we were right back to where things were at before the pre-Fed downward movement.
Which is to say that rates have been moving up and down within a certain range without any real major, breaking news-type dramatic shifts. 30-year fixed rate mortgage loan interest rate numbers are in a best execution range between 4.0% and 4.125%. FHA mortgage loan interest rate numbers are also in a range, all below the four percent zone at 3.5% – 3.75% best execution.
The changes in rates you may have noticed in the last few days may be reflected in closing costs rather than an actual adjustment in the interest rate itself. The rates seen here are listed as best execution rates which assume ideal conditions including a well-qualified borrower.
Your FICO scores and other financial qualifications will play a large role in determining your access to rates similar to the ones seen here. The rates listed here are not available to all borrowers or from all lenders. Your experience may vary.
Industry pros note that in the current short-term rate environment, locking and floating have a higher risk-versus-reward factor right now. Which means if you are holding off on a mortgage rate lock commitment with your lender, you could be rewarded for doing so if rates take a dip lower.
But there’s potential for rates to move in the other direction, too, hence the warning about risk. Bond market activity influences mortgage rates, and market watchers are hoping for some decisive moves in the bond market world soon in the short term.
The problem is, nobody is sure which direction those decisive moves will go. Hence the warning, float at your own risk. Talk to your loan officer about locking versus floating in the short term to get some good advice before choosing to float. You’ll be glad you did.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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